Financial etiquette in the new economy

By Jason Alderman

For many people, 2009 was a bumpy ride. Although the economy is slowly rebounding, times are still tough for those dealing with significant financial issues such as unemployment, lack of health insurance or foreclosure.

We all want to offer friends emotional support during troubling times, but knowing which approach is best isn't always easy, since some people don't want or know how to ask for help. Here are a few common-sense approaches, no matter which side of the equation you're on:

Banish survivor guilt. Just because a friend or co-worker lost their job doesn't mean you can't discuss yours. Work is part of life and a natural topic of conversation, so purposely avoiding it will not go unnoticed and may create awkwardness between you. Just be careful not to let work issues dominate your conversations.

Vent with caution. It's natural for laid-off co-workers to want to unload about former employers. Be a good listener, be discreet, but be careful about chiming in yourself. And, if you're the one venting, be careful not to make your former colleagues uncomfortable. Plus, you never know who's sitting at the next table.

Join the job hunt. If you're unemployed, feel free to network with friends, family and former colleagues. Just don't rely too heavily on their help; you have to lead the charge. Likewise, if it's your friend who's looking, gauge whether he or she is interested in hearing about job leads and know when to back off. You might be able to help revise their resume, practice interviewing skills or even just provide a friendly diversion.

Broaden your social activities. This doesn't mean halting shopping trips or dining out with a newly unemployed friend if that's what you always do together. But try to come up with other, less costly suggestions and let your friend choose. For example, seek out more affordable restaurants, go to a museum's free day or just take a walk together. If you want to pick up the tab, make the offer upfront to avoid any uncertainty, and be gracious whether your invitation is accepted or declined.

Borrowing – or loaning – money. This is a particularly touchy subject, no matter which side you're on. It's hard to turn away a friend in need, but many people can't afford to put their own finances at risk over a personal loan – not to mention the potential for hard feelings if someone defaults. Here are a few suggestions:

If you're being asked to loan money, don't feel obligated to answer immediately. Consider whether you can afford it and if the loan will truly help or merely postpone a painful inevitability.

Try borrowing from a bank or credit union first.

If that doesn't work, third-party services like Virgin Money (www.virginmoneyus.com) provide guidelines and formal loan structure – for a fee – for loans between acquaintances.

Other peer-to-peer lending services such as Prosper (www.prosper.com) and Lending Club (www.lendingclub.com) connect potential borrowers with investors willing to lend money.

Whenever financial difficulties arise for you or an acquaintance, the best things to do are be honest, be considerate, and most importantly, be there for each other.

This article is intended to provide general information and should not be considered tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how tax laws apply to your situation and about your individual financial situation.